Deck 4: Journalizing and Posting Transactions

Question 1

Source documents provide objective, verifiable evidence of business transactions.

Answer 1

True

Question 2

The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts
are equal.

Answer 2

True

Question 3

The purpose of a journal is to provide a chronological record of all transactions completed by the business.

Answer 3

True

Question 4

The Description column of a two-column journal is used to enter the titles of the accounts affected by each
transaction, together with a description of the transaction.

Question 5

The chart of accounts includes the account titles in numerical order.

Question 6

The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.

Question 7

Source documents begin the process of entering transactions in the accounting system.

Question 8

A separate line in the two-column journal should be used for each account title.

Question 9

It is permissible to enter information about a transaction in the ledger accounts first, before entering the information
in the journal.

Question 10

Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or
services.

Question 11

Information about cash disbursements can be obtained from check stubs and carbon copies of checks.

Question 12

The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and preparing a trial balance.

Question 13

The posting reference, amount, and description are the three items of information about each transaction that should
be entered in the ledger accounts.

Question 14

When the trial balance indicates that the ledger is in balance, you can assume there are no errors in the ledger.

Question 15

Entering transactions in a journal is called posting.

Question 16

The ledger is a reliable source of information only when all of the transactions entered in the journal have been
posted.

Question 17

To make the posting process easier, posting reference entries are made at the same time that transactions are
entered in the two-column journal.

Question 18

An account in the chart of accounts is assigned a number at random.

Question 19

The main advantage of a two-column account is that it maintains a running balance.

Question 20

A complete set of all the accounts used by a business is known as the general ledger.

Question 21

When entering titles of accounts in the two-column journal, the account to be credited is entered first and the account to be debited is entered second.

Question 22

Transactions which do not affect the cash account do not need to be entered in the journal, since they do not affect
net income or loss.

Question 23

The general ledger is kept to supply management with desired information in summary form.

Question 24

All transactions must be posted before preparing a trial balance.

Question 25

A two-column journal has only two amount columns-one for the amount of the entry and one for the running
balance.

Question 26

In some cases, erasures are better for corrections than the ruling method.

Question 27

A list of all the accounts used by a business is called a trial balance.

Question 28

No entries are made in the Posting Reference column in a two-column journal when journalizing.

Question 29

Source documents provide the input for the accounting process.

Question 30

Entering the account number in the Posting Reference column of the journal is the first step in the posting process.

Question 31

Almost any document that provides information about a business transaction is included in the chart of accounts.

Question 32

A trial balance can only be accurately prepared on the last day of the accounting period after all transactions
have been entered.

Question 33

After posting journal information to the ledger accounts, a check mark should be entered in the Posting Reference
column of the journal to indicate that the transaction item has been posted.

Question 34

Purchase invoices received from suppliers provide information about cash payments.

Question 35

Firms are more likely to use a four-column journal account than T accounts.

Question 36

The chart of accounts includes assets, liabilities, and owner's equity accounts only.

Question 37

An erasure may suggest that you are hiding something.

Question 38

The process of copying the debits and credits from the journal to the ledger accounts is known as posting.

Question 39

Each entry in the journal affects two or more accounts.

Question 40

The flow of financial data through the accounting information system does NOT include

A) analyzing transactions.
B) journalizing and posting transactions.
C) preparing a trial balance.
D) receiving payment for all accounts receivable.

Question 41

The transaction to record payment for delivery equipment that was purchased on account in the previous month would include

A) debiting Cash and crediting Accounts Receivable.
B) debiting Cash and crediting Accounts Payable.
C) debiting Accounts Payable and crediting Cash.
D) debiting Delivery Equipment and crediting Cash.

Question 42

Every entry in the journal should include all of the following EXCEPT

A) the title of each account affected.
B) the amounts.
C) a brief description.
D) the balance of the accounts affected.

Question 43

Purchase invoices received from suppliers provide information about

A) cash payments.
B) cash receipts.
C) sales of goods or services.
D) purchases of goods or services.

Question 44

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about

A) cash payments.
B) cash receipts.
C) accounts payable.
D) purchases of goods or services.

Question 45

If the owner of a company invested cash in a business enterprise, the transaction would include

A) debiting Cash and crediting Capital.
B) debiting Capital and crediting Cash.
C) debiting Cash and crediting Revenue.
D) debiting Revenue and crediting Cash.

Question 46

The Posting Reference column of the journal provides a cross-reference between the

A) ledger and accounts.
B) journal and ledger.
C) ledger and financial statements.
D) journal and financial statements.

Question 47

Journalizing does NOT include

A) debiting account(s) that are affected.
B) crediting account(s) that are affected.
C) posting the debits and credits to the accounts.
D) entering the date.

Question 48

Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)

A) ledger.
B) account.
C) cross-reference.
D) book of original entry.

Question 49

Sales revenue received in cash is entered by

A) debiting Cash and crediting Sales Revenue.
B) debiting Sales Revenue and crediting Cash.
C) debiting Cash and crediting Accounts Payable.
D) debiting Accounts Payable and crediting Cash.

Question 50

The simplest form of journal is one with

A) four columns.
B) three columns.
C) two columns.
D) one column.

Question 51

Purchase invoices received from suppliers provide information about

A) cash receipts.
B) sales of goods.
C) purchases of goods or services.
D) cash payments.

Question 52

A chart of accounts does NOT include

A) assets.
B) liabilities.
C) owner's equity.
D) names of suppliers.

Question 53

When delivery equipment is purchased on account, the transaction to be entered by the purchaser includes

A) debiting Delivery Equipment and crediting Accounts Payable.
B) debiting Delivery Expense and crediting Cash.
C) debiting Delivery Expense and crediting Accounts Payable.
D) debiting Delivery Equipment and crediting Cash.

Question 54

A chronological record of financial transactions expressed as debits and credits to accounts is provided by the

A) ledger.
B) journal.
C) balance sheet.
D) trial balance.

Question 55

The accounts in the chart of accounts are arranged in

A) alphabetical order.
B) numerical order.
C) chronological order.
D) the order they are created.

Question 56

The steps in the journalizing process include all of the following EXCEPT

A) enter the balance.
B) enter the debit.
C) enter the date.
D) enter the credit.

Question 57

The month in the journal is recorded

A) with every transaction.
B) as the first entry on a page.
C) for the first and last transaction of the month.
D) for the last transaction of the month.

Question 58

For EVERY transaction, the accountant enters the

A) year, month, and day.
B) month and day.
C) day.
D) year and day.

Question 59

Copies of sales tickets or sales invoices issued to customers or clients provide information about

A) sales of goods or services.
B) purchases of goods or services.
C) cash receipts.
D) cash payments.

Question 60

Forms and papers that provide information about a business transaction are called

A) ledgers.
B) accounts.
C) source documents.
D) journals.

Question 61

Journal entries requiring more than one debit and/or one credit are called ____________________.

Question 62

The information in the Posting Reference columns of the journal and the ledger that provides a link between the
journal and the ledger is known as a(n) ____________________.

Question 63

Cash is used to pay for a car for personal use by the owner. The transaction includes

A) debiting Cash and crediting Drawing.
B) debiting Drawing and crediting Cash.
C) debiting Capital and crediting Cash.
D) debiting Car Expense and crediting Cash.

Question 64

Transactions and journal entries are shown below. Read the transaction and determine if the correct journal entry
has been made. If a correction is necessary, prepare a correcting entry.

Question 65

If cash is paid for worker salaries, the transaction includes

A) debiting Salaries Expense and crediting Cash.
B) debiting Salaries Expense and crediting Accounts Payable.
C) debiting Salaries Expense and crediting Capital.
D) debiting Cash and crediting Salaries Expense.

Question 66

Match the terms with the definitions.a.book of original entry
b.chart of accounts
c.compound entry
d.correcting entry
e.cross-reference
f.four-column account
g.general ledger
h.journal
i.journalizing
j.posting
k.ruling method
l.slide error
m.source document
n.transposition error
o.trial balance
​Occurs when debit or credit amounts move a digit or two to the left or right when entered.

Question 67

The Item column in the general ledger is used to describe special entries not including the following entries?

A) Adjusting entries
B) Reversing entries
C) Correcting entries
D) Forwarding entries

Question 68

Instead of T accounts, businesses are more likely to use a

A) chart of accounts.
B) balance sheet.
C) four-column account.
D) special journal.

Question 69

The following transactions occurred at Forever Green Lawn Service. Identify which account would be debited and
credited to record each transaction. Write the identifying letters in the proper columns. The first transaction has been
completed as an examplE.​
A.Cash
B.Accounts Receivable
C.Supplies
D.Equipment
E.Accounts Payable
F.Fees Income
G.Rent Expense
H.Salaries Expense
I.Telephone Expense
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Question 70

Prepare general journal entries to record the following transactions. Omit explanations.
​
Jan. 3
Paid office rent, $1,600.
4
Bought a truck costing $50,000, making a down payment of $7,000.
6
Paid wages, $3,000.
7
Received $16,000 cash from customers for services performeD.10
Paid $4,100 owed on last month's bills.
12
Billed credit customers, $5,300.
17
Received $1,800 from credit customers.
19
Taylor Gordon, the owner, withdrew $1,700.
23
Paid $700 on amount owed for truck.
29
Received bill for utilities expense, $255.
​

Question 71

A list of all accounts (account titles) used by a business is called a(n) ____________________.

Question 72

The Item column in a general ledger is used to provide ____________________ for special entries.

Question 73

To find an error, you should do all of the following EXCEPT

A) double-check every entry.
B) find the difference between debits and credits.
C) erase questionable entries.
D) retrace any math computations.

Question 74

Corrections in accounts should NOT be

A) traceable.
B) initialed.
C) ruled.
D) covered completely.

Question 75

George Smyth opened a computer repair business on Apr. 1, 20--. During the first month of operations, the firm had
the following transactions. Record these transactions on page 1 of the general journal. Omit explanations.
Post appropriate transactions to the general ledger.
Apr. 1
George Smyth invested $30,000 cash in the business.
2
Paid rent for April, $2,100.
8
Bought equipment for $12,000 and issued a check for $3,000 as a down payment.
12
Performed services for $3,200 in cash, and $1,200 on credit.
19
Paid electric bill, $225.
25
Received $900 on account from credit customers.
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Question 76

The journal is commonly referred to as a(n) ____________________, because it is here that the first formal accounting record of a transaction is made.

Question 77

Corrections in accounts should be made by

A) correction fluid.
B) neat erasure.
C) the ruling method.
D) a permanent marker.

Question 78

When an incorrect entry has been journalized and posted to a wrong account or for the wrong amount, a(n) ____________________ is required.

Question 79

The payment of a utility bill (like electricity) for the month would include

A) debiting Capital and crediting Accounts Payable.
B) debiting Cash and crediting Utilities Expense.
C) debiting Utilities Expense and crediting Accounts Payable.
D) debiting Utilities Expense and crediting Cash.

Question 80

Posting from the journal to the ledger does NOT involve which of the following steps?

A) Enter the date of each transaction in the accounts.
B) Enter the amount of each transaction in the accounts.
C) Enter the page of the journal from which each transaction is posted in the accounts.
D) Enter the description of the entry.